Cyber-attacks could cost as much as natural disasters
An “extreme cyber-attack” could have the same economic impact as Hurricane Sandy, according to a new report.
Lloyds, the specialist insurance and reinsurance market, released the report “Counting the cost: Cyber exposure decoded” which details the potential cost a large scale cyber-attack could have on an economy. To find out more about the threat of cybercrime make sure to attend the ICAS Conference on 20 September at the EICC.
The report sets out two fictitious scenarios where the cyber security of a business is breached. The first considers “a malicious hack that takes down a cloud service provider”, which Lloyds estimates would incur $53bn of losses. The economic losses sustained by Hurricane Sandy were estimated to be between $50bn and $70bn, for comparison.
Just like some of the worst natural catastrophes, cyber events can cause a severe impact on businesses and economies,
The second examines an attack on operating systems which are commonly used by businesses around the world, with losses predicted to be around $28.7bn.
“This report gives a real sense of the scale of damage a cyber-attack could cause the global economy,” said Inga Beale, CEO of Lloyds.
“Just like some of the worst natural catastrophes, cyber events can cause a severe impact on businesses and economies, trigger multiple claims and dramatically increase insurers’ claims costs.”
“Underwriters need to consider cyber cover in this way and ensure that premium calculations keep pace with the cyber threat reality.
“We have provided these scenarios to help insurers gain a better understanding of their cyber risk exposures so they can improve their portfolio exposure management and risk pricing, set appropriate limits and expand into this fast-growing, innovative insurance class with confidence.”
It is estimated that businesses lose around $450bn a year globally to cyber-attacks.
The report comes months after a mass ransomware attack which targeted computers in over 100 countries and around 200,000 businesses - significantly damaging the IT systems of the NHS in the UK.
The term ransomware is a type of cyber-attack where an individual or a group of hackers, target computer systems and lock approved users out. Access is only released when a “ransom” is paid.
The ransomware is usually activated when a user clicks on a link or attachment in an email which looks legitimate but contains malicious software, which is then downloaded onto systems allowing the attacker to take control.
ICAS Conference 2017
John Shaw, Vice President at Sophos Plc will be discussing cyber security and setting the record straight on how worried we should be about hackers, ransomeware and cyberspies.